WASHINGTON -- President Bush fought for his political life last night using the same battle cry against his new foe -- the deeply ailing economy -- that he took up last year against Iraq: "This will not stand."
In a State of the Union address that has been called critical to his re-election, Mr. Bush outlined what he wants to do to end "hard times" and attempted to re-ignite the patriotic spirit that made the president last year's hero after the Persian Gulf war.
"We are going to lift this nation out of hard times inch by inch and day by day, and those who would stop us had best step aside," the president said, openly taunting the Democratic lawmakers assembled before him in a joint session of Congress. "The people cannot wait, they need help now."
The nearly hourlong address was by far the president's lengthiest and most unusual performance in this forum.
For those wanting substance, he offered mind-numbing details of new tax breaks, investment incentives and unilateral steps he has ordered the government to take to help jump- start the economy and increase productivity for the long term.
For those wanting encouragement, he recalled the brighter moments of America's recent past, citing not only its victory in the gulf war but in hastening the death of communism.
He declared victory in the Cold War. And he reminded Americans discouraged by the dispirited "mood among us" that they had been first on the moon and that their farmers feed the world.
For those who had already criticized his economic program as too generous to the rich and not beneficial enough to those who really need the help, Mr. Bush offered some barbs. "You kind of remind me of the Puritan who couldn't sleep at night worrying that somehow someone somewhere was out having a good time," he said.
And despite a tone that was largely measured and practiced at being presidential, Mr. Bush opened with a light note by repeating the self-deprecating refrain he has used almost constantly since vomiting at a state dinner in Japan, explaining that was why House Speaker Thomas S. Foley and Vice President Dan Quayle "are sitting behind me."
The president was attempting to heal his now-serious political malaise: the longest-running recession since World War II, fueled by industrial aches that refused to go away before voters began to consider whether they would give him a second term.
At the time he began speaking last night, Mr. Bush's job approval rating had dropped to a new low for his term, with just 43 percent of those surveyed for a New York Times/CBS poll saying they approved.
He had reached the point where Americans, who only a year ago admired him more than they had any of his predecessors the past half-century for his handling of the Persian Gulf war, saw him as uninterested in their domestic plight and unable to relate to the way ordinary people live.
The president's economic plan, which had been previewed in a series of leaked reports over the past few weeks, last night drew the criticism Mr. Bush had anticipated.
House Speaker Foley, delivering the Democratic response to the address, said congressional leaders did not want to adopt the same supply-side economic approach Republican administrations have promoted for more than a decade.
"We seek a fundamental change for the unsuccessful economic policies of the past 12 years," said Mr. Foley, who particularly attacked Mr. Bush's renewed attempt to cut the capital gains tax on profits from the sale of assets. "We will insist that this time, the benefits must go to working families, not to the privileged."
Mr. Bush's proposals also drew immediate fire from the AFL-CIO, which called them "another version of the same old formula of tax cuts for the well-heeled."
The president drew mixed reviews from economists.
Paul W. McCracken, chief economic adviser to former President Richard M. Nixon and a professor emeritus at the University of Michigan's School of Business Administration, said: "It added up to a more substantive program than I had assumed. If all of that is put into place, it will make a difference to the economy. I think it will pep things up a bit."
Lawrence A. Hunter, acting economist of the U.S. Chamber of Commerce, welcomed the proposed capital gains cut, the investment tax allowance and the research-and-development tax credit, saying: "I want to say, 'Yes, it's a good package . . . but my first reaction is, it is probably not going to provide the kind of long-term solution we have been seeking. What he has chosen is sort of timid. . . . It is not a kind of bold approach."
The president's package includes a series of short-term measures meant to immediately stimulate the sick economy, highlighted by an order to the Internal Revenue Service to immediately shrink tax withheld from weekly paychecks. He said this would free $25 billion that people could use right away "to help pay for clothing, college or to get a new car."
In another move the president can undertake on his own authority, Mr. Bush imposed a 90-day moratorium on "any new federal regulations that could hinder growth."
Adopting a plan urged on him by Republican lawmakers, Mr. Bush set a deadline of March 20 for the Democratic-controlled Congress to enact another set of "common sense proposals" that he said would "have a strong effect on the economy -- without breaking the budget agreement and without raising taxes."
These include another extension of unemployment benefits by an additional 13 weeks; tax breaks for first-time home buyers that would allow them to use money from Investment Retirement Accounts without penalty and obtain a $5,000 tax credit as well; and a new 15 percent investment tax allowance, as well as a cut in the capital gains tax on profits on the sale of assets from the current 28 percent to 15.4 percent.
Other economic proposals identified by the president as part of an overall program to strengthen families include an increase in the personal income tax exemption by $500 per child, which would amount to a savings of about $75 per child per year for taxpayers in the 15 percent bracket.
Mr. Bush also announced he was ordering a freeze on domestic discretionary spending and a freeze on hiring by the federal government, which officials said would save 4 percent on spending in 1992.
Mindful that the availability of health care ranks as the second most important issue on the minds of many voters this year, Mr. Bush provided the first outlines of his own comprehensive reform proposal.
It includes a health insurance tax credit of up to $3,750 for each low-income family, he said, but he provided no further details.
Mr. Bush sought to portray his successes on the world stage as both a boost for America's global stature and a plus for taxpayers.
He said it was now possible to make $50 billion worth of cuts in the defense budget over five years and announced new arms control reductions he said could be accelerated by the breakup of the Soviet Union.
Mr. Bush suggested that the Cold War victory over Moscow -- financed by U.S. taxpayers -- would now allow the country to turn more of its attention inward.
Defeat of "imperial communism," he said, will allow what he called "dramatic" changes in U.S. strategic forces, including ending productionof the B-2 bomber, canceling the intercontinental ballistic missile program, halting production of new warheads for sea-based missiles and the MX missile, and halting purchases of advanced cruise missiles.
Further sweeping cuts will be possible if the republics of the former Soviet Union reciprocate, he said. These could include eliminating the MX, cutting Minuteman missiles, a two-thirds reduction in sea-based missile warheads and conversion of bombers to non-nuclear uses.
The initial response from Russian President Boris N. Yeltsin -- DTC with whom Mr. Bush is to meet on Saturday at Camp David -- has been "very positive," the president said.
But Mr. Bush rejected the "America First" pitch of GOP challenger Patrick Buchanan, saying, "Strength in the pursuit of peace is no vice. Isolationism in the pursuit of security is no virtue."
Mr. Bush was scheduled to immediately begin the job of selling his proposals to Congress by hand-carrying them personally to Capitol Hill this morning. Tomorrow he takes his new program on the road with an address to the Greater Philadelphia Chamber of Commerce.
Bush proposals
* For families: $500 more in deduction for each child.
* For 90 million poor and middle-income Americans: change tax withholding to increase take-home pay.
* For the sick and uninsured: an improved health care package, with details in two weeks.
* For borrowers: ease restraints on loans by banks and thrifts.
* For businesses: 90-day freeze on federal controls; a study of more ways to free companies' energies; faster tax write-offs for new equipment and property.
* For longer-term investors: cut capital gains tax maximum from 28 percent to 15 percent.
* For first-time home buyers: tax credits up to $5,000 and penalty-free use of IRAs.
* For the jobless: $4.4 billion in extended benefits.
* Sacrifices for Pentagon and defense industries: $50 billion cutback in Pentagon spending; reduce nuclear arsenal; end Stealth bomber production.